Reverse Spin: Flowers gets Green Tree over Buffett

Going, going, gone! And NOT to the billionaire in the back of the room.

Despite being one of the richest men in the world, Warren E. Buffett lost his fight to buy Conseco Inc.’s St. Paul, Minn.-based manufactured-housing lender in a 21-hour bidding war.

Mr. Buffett apparently walked away from the bargaining table after 21 hours when it came time to up his $970 million bid for Conseco Finance by an extra $30.1 million. As a result, ex-Wall Streeter Christopher Flowers and his partners grabbed the prize for $1.01 billion.

Conseco, of Carmel, Ind., paid $6 billion in 1998 for the manufactured-housing-loan assets of what was then known as Green Tree Financial Group.

Mr. Flowers’ partnership, CFN Investments LLC of New York, will pay $700 million for Conseco Finance’s $23 billion mobile-home loan portfolio, while partner GE Consumer Finance will pay $310 million for Conseco’s Mill Creek Bank, a Salt Lake City-based subsidiary that offers consumer and small-business loans.

Royal pain

How’s that for the royal treatment?

According to published reports Friday, J.P. Morgan Chase & Co. fired two investment bankers two weeks ago after a colleague complained that they sexually accosted a less-senior investment banker at a bar.

The two bankers were managing director Palden Gyuimed Namgyal and vice president Norman Gretzinger. Mr. Namgyal, 39, is the son of American heiress Hope Cooke and the late Palden Thondup Namgyal, the last king of Sikkim, a tiny protectorate in the Himalayas that is now part of India.

Dark times

So much for counting on sales of duct tape and plastic sheeting to hold together the economy.

The economy remained downcast in January and February, thanks to soaring energy prices, a bout of bad weather and concerns about a possible war with Iraq, according to the Federal Reserve’s Beige Book, released Wednesday.

“Consumer spending remained weak, on balance … Business spending was very soft, with little change in capital spending or hiring plans,” the report concludes.

Double trouble

Get ready for the double dip – and we’re not talking about an ice cream cone.

The economy suffered its worst drop in jobs since the aftermath of the Sept. 11, 2001, attacks, the Department of Labor said Friday. Payrolls outside the farm sector plunged 308,000 in February, the biggest decline since a 327,000-drop in November 2001.

The slide in payrolls may be due in part to the call-up of U.S. military reserves because of the Iraq crisis, a Labor Department official said.

Even so, Pierre Ellis, an economist with Decision Economics Inc. in New York, reportedly called the payroll figure “catastrophically weak.”

“The Fed is going to have to think very seriously about cutting interest rates,” Mr. Ellis added.

“This kind of job loss translates into potential serious damage to consumer spending. A decline … would put the economy into double-dip recession very quickly.”

Playing it safe

The conservatives are getting more conservative.

Fidelity Investments in Boston has cut to 7% its expectation for annual returns on its employee pension plan, making its target one of the lowest at a major company, according to a report Thursday.

The fund giant has long played it safe with regard to expected pension-plan returns, keeping its target at 7.75% even as the market reached its peak in 1999. Citigroup Inc. in New York also recently cut its pension-growth target to 8% from 9.5%.